Hurricane Irene strengthened overnight into a strong Category 2 storm, just shy of reaching major hurricane status, according to the National Hurricane Center.

At 5 a.m. Wednesday, Irene was packing maximum sustained winds of 110 mph, making it a strong Category 2 storm and one mph less than Category 3 strength.

Irene is located about 370 miles southeast of Nassau, Bahamas and about 955 miles south of Cape Hatteras, North Carolina, according to the National Hurricane Center.

Irene is moving west-northwest at about 9 mph.

The storm is forecast to intensify into a category 3 system with sustained winds of 125 mph as it moves parallel to Florida's coastline on Thursday.

The good news: The entire state of Florida is out of the cone of error.

While residents are urged to remain vigilant, the projected path remains about 200 miles east ofMiami, Fort Lauderdale andWestPalm Beach. It is expected to be even farther east ofDaytona Beach.

However, a tropical storm watch was issued Tuesday evening for the waters off South Florida; the watch does not include land.

Because the model guidance now shows close agreement, forecasters at the National Hurricane Center are confident the current forecast track will hold.

Even though Irene's core is forecast to stay well offshore, the large system likely will spread gusty winds and rains along Florida's entire coastline. Its hurricane force winds extend 40 miles from its center and its tropical force winds extend 205 miles.

South Florida can expect to start seeing the storm's outer fringes on Thursday morning, Central Florida by the afternoon. Winds should reach 20 to 30 mph in both regions with higher gusts possible, the National Weather Service said.

"Definitely, the strongest winds will be over the offshore waters," meteorologist Dave Ross said.

Irene is expected to produce 1 to 1.5 inches of rain along the state's coastline.

"It doesn't look like too big of a rainmaker," Ross said.

A major concern: Large waves, a rough surf and beach erosion. By Thursday evening, waves could build up to 20 feet, particularly in northern Palm Beach County, the weather service said.

South Florida should be in the clear by Friday morning, Central Florida by Friday evening.

The forecast track calls for Irene to affect the Turks and Caicos Islands on Tuesday night, move into the southern and central Bahamas late Tuesday night and Wednesday, then churn into the northwestern Bahamas as a major hurricane early on Thursday. It's predicted to produce from 6 to 12 inches of rain along its path.

After paralleling the Florida coast, it is forecast to take aim for the Outer Banks of North Carolina on Saturday. However, because there is much uncertainty in the long-range forecast, whether it will hit the U.S. coast or possibly swerve out to sea remains a question mark.

Meanwhile, the Hurricane Center was monitoring a tropical wave about 125 miles south of the Cape Verde Islands. The wave was given a 40 percent chance of developing into a tropical storm in the next couple days.